Economics · Monetary Policy
What primary action does a government take during the process of demonetization?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Reduces the statutory liquidity ratio of banks
- 2Pins the exchange rate to a foreign currency
- 3Strips specific currency notes of their status as legal tender and introduces new currency notes✓
- 4Imposes restrictions on gold imports
Correct answer
Strips specific currency notes of their status as legal tender and introduces new currency notes
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